Opinion

Untitled Texas Attorney General Opinion

Court
Texas Attorney General Reports
Filed
Jul 2, 1981
Status
Published
On the bench
Mark White
Cited by
0 cases
Authority
More cited than 3.5%

The opinion

The Attorney General of Texas

May 29. 1981

MARK WHITE

Attorney General

Honorable Gibson D. (Gib) Lewis Opinion No. MU-344

Chairman

Committee on Intergovernmental Re: Competitive bidding require-

Affairs ment

House of Representatives

John H. Reagan Bldg., No. 114

Austin, Texas 787ll

Dear Representative Lewis:

You have requested our opinion as to whether the Soard of Trustees of

Galveston Wharves is required to receive competitive bids in order to award

a contract for the services of a container terminal operator.

The Board of Trustees of Galveston Wharves Is a public body which

operates the port facilities of the city of Galveston, pursuant to article

ll87f, V.T.C.S. The board presently operates a container terminal at the

port, consisting of, inter alia, lrtwo ships’ berths, two high-speed specialized

40-ton container cranes, and upland area of approximately 32 acres for the

storage and placement of containers varying in size from 20 foot to 40 foot

lengths.” The board proposes to contract with a container terminal operator

for the purpose of operating these facilities. You ask .whether the board

must engage in competitive bidding in order to award such a contract.

We note initially that the board of trustees may not &legate any

governmental function to a private business. In City of Galveston v. Hill,

519 S.W. 2d 103 (Tex. 19’751,the supreme court held that, although the board

was authorized to lease a grain elevator facility at the Port of Galveston to

a private concern %o as to secure special expertise necessary to operate it,”

it was not “empowered to delegate its governmental or legislative

functions%

. . . The management and control of the facility. . .

is to be limited to proprietary affairs and must not

involve the redelegation of governmental or legisla-

tive functions of the board of trustees. The manage

ment of income and revenue from the Galveston

Wharves, the setting of rates and the determination

Of policies, being governmental functions, have been

explicitly vested in the discretion of the board of

trustees by the city charter, and such cannot be

surrendered, delegated or bartered away.

p. 1134

Honorable Gibson D. (Gib) Lewis - Page Two (hW-344)

519 S.W. 2d at 106. For purposes of this opinion, we assume that a contract to operate

the container terminal facilities would not require the delegation of governmental

functions.

Article 2368a, V.T.C.S., provides, in pertinent part:

Sec. 2. (a) No county, acting through its Commissioners

Court, and no city in this state shall hereafter make any

contract calling for or requiring the expenditure of payment of

Three Thousand Dollars ($3,000.00) or more out of any fund or

funds of any city or county or subdivision of any county creating

or imposing an obligation or liability of any nature or character

upon such county or any subdivision of such county, or upon such

city, without first submitting such proposed contract to

competitive bids. Notice of the time and place when and where

such contracts shall be let shall be published in such county (if

concerning a county contract or contracts for such subdivision

of such county) and in such city, (if concerning a city contract),

once a week for two (2) consecutive weeks prior to the time set

for letting such contract, the date of the first publication to be

at least fourteen (14) days prior to the date set for letting said

contract; and said contract shall be let to the lowest responsible

bidder. The court and/ or governing body shall have the right to

reject any and all bids, and if the contract is for the

construction of public works, then the successful bidder shall be

required to give a good and sufficient bond In the full amount of

the contract price, for the faithful performance of such

contract, executed by some surety company authorized to do

business in thii state in accordance with the provisions of

Article 5160, Revised Statutes of 1925, and the amendments

thereto. However, the city or county in making any contract

calling for or requiring the expenditure of payment of Three

Thousand Dollars ($3,000.00) or more and less than Fifty

Thousand Dollars ($50,000.00) may, in lieu of the bond require-

ment, provide the contract that no money will be paid to the

contractor until completion and acceptance of the work by the

city or county. If there is no newspaper published in such

county, the notice of the letting of such contract by such

county shall be given by causing notice thereof to be posted at

the County Court House door for fourteen (14) days prior to the

time of letting such contract. If there is no newspaper

published in such city, then the notice of letting such contract

shall be given by causing notice thereof to be posted at the City

Hall for fourteen U4) days prior to the time of letting such

contract. Provided, that in case of public calamity, where it

becomes necessary to act at once to appropriate money to

relieve the necessity of the citizens, or to preserve the property

p. 1135

Honorable Gibson D. (Gib) Lewis - Page Three (~~-344)

of such county, subdivision, or city, or when it is necessary to

preserve or protect the public health of the citizens of such

county or city, or in case of unforeseen damage to public

property, machinery or equipment, this provision shall not

apply; and provided further, as to contracts for personal or

rofessional services; work done by such county or city and paid

or bv the dav. as such work orouresses: and the ourchase of

land &d righi:of-way for authorLed needs and purposes, the

provisions hereof requiring competitive bids shall not apply and

in such cases the notice herein provided shall be given but only

with respect to an intention to issue time warrants with right of

referendum as contemplated in Sections 3 and 4 hereof

respectively. (Emphasis added).

You suggest that any contract to operate container terminal facilities would constitute

a contract for “personal or professional services” and thus be excepted from the

bidding provisions of article 2368a.

The statutory exception in section 2 of article 2368a for %ontracts for personal

or professional services” was added in 1931. Acts 1931, 42d Leg., ch. 163, at 269. In

Attorney General Opinion H-660 (l975), thii office, in holding that a commissioners

court was authorized to contract for law enforcement consultant services without

receiving competitive bids therefor, said that the exception for “personal or

professional services”:

appears to be a codification of a case law exception concerning

contracts for services requiring special shills.

In support of this proposition, Opinion H-660 cites Stephens 52

S.W. 2d 53 (Tex. 1932), which upheld the execution & a contract for the services of an

architect without *competitive bids. Two other cases brought under the pre-1931

statute involved architectural services, one related to a contract with a civil engineer,

and one uoheld a contract with a oavina comoanv for suoervision of countv road

construction wor Attorney Gene&l O$nion‘C-267 (1964). The latter ca&, Gulf

Bitulithic Co. v. lt ueces Counts ll S.W. 2d 305, 309-10 (Tex. Comm’n App. 1926), isthe

only instance of a Texas court’s upholding a contract in which the contractor was not a

member of a clearly recognized profession.

Whatever the state of the case law in 1931, the exception enacted that year did

not establish a “special skillr? standard, but one of “personal or professional services.”

To the extent that Attorney General Opinion H-680 (l975) suggests otherwise, we

believe it is incorrect. In our view, it is necessary to examine the particular meanings

of “personal services” and “professional services” to determine whether a contract for

the services of a container terminal operator falls within either category.

In Van Zandt v. Fort Worth Press, 359 SW. 2d 893 (Tex. 1962), a newspaper

p. 1136

Honorable Gibson D. (Gib) Lewis - Page Four (~~-344)

brought an action to recover amounts due for advertising services. The ne,wspaper

contended that advertising services were “personal services,” and, as a result, article

2226, V.T.C.S., authorized the recovery of attorneys fees therefor. The supreme court

quoted with approval the Supreme Court of Utah:

The term ‘personal service’ indicates that the ‘act’ done for the

benefit of another is done personally by a particular individual.

(Emphasis in original).

359 S.W. 2d at 895. The court held that, although the labor of the newspaper’s

employees might qualify as “personal services, ” the cause of action was for something

more inclusive - “advertising services ” - which embraced not merely personal

services, but profit, taxes, insurance and other items.

In Radio KOKE, Inc. v. Tiemann, 378S.W. 2d 952 (Tex. Civ. App. - Austin 1964,

writ reM n.r.e.). olaintiff soueht attornevs fees under article 2226 in a suit to recover

the Cost of mo&g householzgoods. The court said that attorneys fees might have

been recoverable on that portion of the contract attributable to employees’ wages, if

the wages had been separately itemized. But when no itemization is made and the use

of -machinery and equipment is part of the cost of the contract, the contract Is one for

“personal services” only if the contribution of the machinery to total cost is

substantially less than the contribution of employee wages. As an example of a

contract that could not be considered one for personal services, the court suggested

the operation of a loo-car freight train by a crew of three or four men. The

employment of a laborer to dig a ditch using his own pick and shovel, on the other

hand, is clearly a contract for personal services.

In our opinion, these two cases indicate clearly that a contract to operate

container terminal facilities, which operation you have described as complex and

{technical, cannot reasonably be described as one for “personal services.” Even if a

large portion of the contract price is assigned to labor costs, the total contract amount

will certainly include costs ascribable to taxes and insurance as well as the operator’s

anticipated profit. Accordingly, the contract may not be excepted from the

competitive bidding requirement of article 236aa as a “contract for personal services.”

The meaning of “professional services” is less clear, but court decisions in this

area are sufficiently similar to persuade us that a container terminal operator does not

perform them. In Maryland Casualty Co. v. Crazy Water Co., 160 S.W. 2d 102 (Tex.

Civ. App. - Eastland 1942, no writ), the court determined that operating a bath house is

a business rather than a profession. In a profession, the court said, the labor and skill

required are “predominantly mental or intellectual, rather than physical or manual.”

160 S.W. 2d at 105. See also, Horn v. Burns and Roe, 536 F; 2d 251, 255 (8th Cir., 1976).

A Louisiana court, in Transportation Displays, Inc. v. City of New Orleans, 346

So. 2d 359 (La. App. 1977), held that public bidding was required on a contract to

conduct the sale of advertising space and facilities at an airport, since the sale of

p. 1137

Honorable Gibson D. (Gib) Lewis - Page Five (MW-344)

advertising services did not constitute the rendering of “professional services.” A

“professional,” the court observed :

denotes a person in a profession which requires years of

education and service for one to attain competence and which

calls for a high order of intelligence, skill and learning.

346 So. 2d at 363, fn. 5.

The most useful standard for judging the scope of “profession” was furnished by

the Supreme Court of West Virginia in Wooddell v. Dailey, 230 S.E. 2d 466 (W.Va.

19’76). In that case, the court, while holding that the activities of an interior decorator

were not “professional services,” acknowledged that the term included more than

“theology, law or medicine.” Neither was the term limited to the pursuit of occupations

specifically recognized as professions by statute. 230 S.E. 2d at 469-70. But a

“profession” must be established es such. While ” most occupations, trades,

business or callings require a diversity of knowledge and skill,” it is only the

“professional” who:

is a member of [a] discipline with widely accepted standards of

required study or specified attainments in special knowledge as

distinguished from mere skill.

-Id. at 470.

Likewise, in Glushak v. City of New York, 178 N.Y.S. 2d 33 (App. Div. 19581, the

court emphasized the factor of recognition in holding that a renderer, who prepared

pictorial representations of proposed buildings from plans submitted by professional

architects and builders, did not perform “professional services”:

The status of a professional. . . does not include persons who,

while working in fields related to recognized professions, have

not yet achieved that recognition themselves.

178 N.Y.S. 2d at 36.

For the same reasons, we do not believe that a container terminal operator may

fairly be said to be a member of a recognized profession. As a result, a contract for

the services of such an individual or company is not excepted from the competitive

bidding requirement of article 2368a as a “contract for professional services.” We

conclude that the Board of Trustees of Galveston Wharves is required to receive

competitive bids pursuant to article 2368a in order to award a contract for the

services of a container terminal operator.

SUMMARY

The Board of Trustees of Galveston Wharves is required to

receive competitive bids pursuant to article 2368a, V.T.C.S., in

p. 1138

Honorable Gibson D. (Gib) Lewis - Page Six (~~-344)

order to award a contract for the services of a container

terminal operator.

WWF&g

Attorney General of Texas

JOHN W. FAINTER, JR.

First Assistant Attorney General

RICHARD E. GRAY, HI

Executive Assistant Attorney General

Prepared by Rick Gilpin

Assistant Attorney General

APPROVED:

OPINION COMMlTTEE

Susan L. Garrison, Chairman

Mahon B. Gary, Jr.

Rick Gilpin

Jim Moellinger

p. 1139

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

A word about cookies

We need a few to keep you signed in and the library working. The rest help us see which pages people use and where they get stuck. They stay off unless you say yes.